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Income Tax Planning
Chapter 11: The Taxation of Capital Assets/NIIT: EXAMPLE
Warren Academy Course SyllabusSyllabus Slides
Chapter Study Session

Chapter 11: The Taxation of Capital Assets

NIIT: EXAMPLE

01.Core Concepts

Bruce, a single filer, has $180,000 of wages. Bruce also received $90,000 taxed as a short-term capital gain on the sale of property, which is considered net investment income. Bruce’s modified adjusted gross income is $270,000. • Bruce’s modified adjusted gross income (MAGI) exceeds the threshold of $200,000 for single taxpayers by $70,000. • His net investment income is $90,000. • The net investment income tax (NIIT) is $2,660 ($70,000 x 3.8%).